The country’s rural electric cooperatives have received a small share of the Department of Energy’s $4.5 billion in smart grid stimulus grants. But their chief federal benefactor hasn’t been the DOE, but rather the USDA, which has handed out billions of dollars in loans for energy and communications projects over the past few years -- including small, but significant, portions aimed at the smart grid.

Last week, USDA launched its latest round of loans from its Rural Utilities Service Program, totaling $1.8 billion for projects across 25 states. While the lion’s share is aimed at building and upgrading transmission and distribution lines, building new generation and other core grid investments, about $45 million will go toward smart grid technology.

That split highlights the unique challenges that rural electric co-ops face in bringing energy to their far-flung customer-owners. While the country's 863 rural electric co-ops only serve about 12 percent of the country's population, they own nearly 40 percent of the country’s distribution lines and cover nearly three-quarters of the land mass. That makes their costs of service per customer much higher than most utilities -- and leads to customer energy costs that are 275 percent higher than the national average.

And because rural co-op customers are also shareholders in their utility, they’re directly involved in the tough choices between short-term costs and long-term benefits that come with smart grid investment choices. GTM Research predicts that U.S. rural cooperatives will spend $4.1 billion on smart grid technologies from 2013 to 2017 -- but technology vendors will have to meet their unique challenges to capture that small but important share of business.

Some noteworthy vendors in the rural co-op space include Aclara, the smart meter technology vendor that’s now being sold by parent company Esco Technologies; Harris Utilities, which provides smart grid software through its string of customer information service companies, meter data management providers MeterSense and SmartWorks; Tantalus, the smart grid communications provider with projects ranging from wireless mesh to fiber-optic networks; Sensus, the smart metering vendor that counts a number of co-ops among a customer list that also includes giants like Southern Company; and Verdeeco, a startup that’s building cloud-hosted data analytics for the rural co-op market.

Another key vendor is the National Information Solutions Cooperative, or NISC -- itself a member-owned cooperative that provides software and services to about 700 community-based utility and telco providers in North America. Because rural co-ops lack the deep pockets and R&D budgets to invest in technology, they tend to rely on member organizations like NISC and the National Rural Electric Cooperative Association (NRECA) to pool their efforts.

At the same time, smart grid vendors across the spectrum are targeting rural electric co-ops, small municipal utilities and public utility districts as the next growth market. Companies making strides in these efforts include Silver Spring Networks, General Electric, AT&T, Leidos (formerly SAIC), Siemens/eMeter and Toshiba’s Landis+Gyr, to name a few.

Beyond grid-focused funding, rural electric co-ops are also looking at a huge source of federal funding for broadband technologies that could help bootstrap more advanced smart grid capabilities. The Federal Communications Commission has been ordered to help the Departments of Commerce and Agriculture to award $7.2 billion in grants, loans, and loan guarantees to support the rollout of broadband to rural communities, as well as measure and manage the process for best results, over the coming years.

While last week's announcement doesn't specify just what technologies will be getting deployed in each of the smart grid projects, it's likely that smart meters will top the list, followed by distribution automation deployments. Those are the top two categories that rural electric cooperatives plan to spend their money on, according to GTM Research:

Here’s a list of projects that include smart grid components that won conditional loan guarantees in last week’s announcement, organized by state.

Alaska: Golden Valley Electric Association, Inc., $43,723,000. Funds will be used to serve 1,298 consumers, build 126 miles of distribution line, and make other system improvements. The loan amount includes $3,449,404 for smart grid projects.

Arizona: Navajo Tribal Utility Authority, $167,779,000. Funds will be used to serve 3,795 consumers, build 1,106 miles of distribution line and 109 miles of transmission line and make other system improvements. The loan amount includes $5,730,145 for smart grid projects.

Indiana: Marshall County Rural Electric Membership Corporation, $6,000,000. Funds will be used to serve 226 consumers, build 105 miles of distribution line, and make other system improvements. The loan amount includes $347,155 for smart grid projects.

Iowa: Maquoketa Valley Rural Electric Cooperative, $5,000,000. Funds will be used to serve 605 consumers, build 198 miles of distribution line, and make other system improvements. The loan amount includes $54,553 for smart grid projects

Michigan: Great Lakes Energy Cooperative, $60,000,000. Funds will be used to serve 2,464 consumers, build 363 miles of distribution line and make other system improvements. The loan amount includes $1,521,017 for smart grid projects.

Minnesota: Minnesota Valley Cooperative Light and Power Association, $10,875,000. Funds will be used to serve 160 consumers, build 80 miles of distribution line, and make other system improvements. The loan amount includes $660,000 for smart grid projects.

Minnesota: Traverse Electric Cooperative, Inc., $4,664,000. Funds will be used to serve 154 consumers, build 63 miles of distribution line, and make other system improvements. The loan amount includes $1,458,000 for smart grid projects.

New Mexico: Kit Carson Electric Cooperative, Inc., $33,099,000. Funds will be used to serve 1,346 consumers, build 284 miles of distribution line, and make other system improvements. The loan amount includes $2,202,800 for smart grid projects.

North Carolina: EnergyUnited Electric Membership Corporation, $34,000,000. Funds will be used to serve 3,748 consumers, build 309 miles of distribution line and 4 miles of transmission line, and make other system improvements. The loan amount includes $561,000 for smart grid projects.

North Dakota: Capital Electric Cooperative, Inc., $31,000,000. Funds will be used to serve 2,823 consumers, build 265 miles of distribution line, and make other system improvements. The loan amount includes $2,086,800 for smart grid projects.

North Dakota: Verendrye Electric Cooperative, Inc., $63,000,000. Funds will be used to serve 4,597 consumers, build 741 miles of distribution lines, and make other system improvements. The loan amount includes $1,164,000 for smart grid projects.

North Dakota: Nodak Electric Cooperative, Inc., $31,192,000. Funds will be used to serve 920 consumers, build 450 miles of distribution line, and make other system improvements. The loan amount includes $2,422,000 for smart grid projects.

Pennsylvania: Bedford Rural Electric Cooperative, Inc., $4,000,000. Funds will be used to serve 340 consumers, build 109 miles of distribution line, and make other system improvements. The loan amount includes $153,600 for smart grid projects.

South Carolina: Fairfield Electric Cooperative, Inc., $16,000,000. Funds will be used to serve 3,099 consumers, build 322 miles of distribution line, and make other system improvements. The loan amount includes $406,665 for smart grid projects

South Dakota: Lake Region Electric Association, $9,700,000. Funds will be used to serve 181 consumers, build 159 miles of distribution lines, and make other system improvements. The loan amount includes $1,977,826 for smart grid projects.

Tennessee and Kentucky: Cumberland Electric Membership, $20,000,000. Funds will be used to serve 6,207 consumers, build 607 miles of distribution line, and make other system improvements. The loan amount includes $826,500 for smart grid projects.

Texas: Rusk County Electric Cooperative, Inc., $22,005,000. Funds will be used to serve 2,452 consumers, build 112 miles of distribution line, and make other system improvements. The loan amount includes $4,241,516 for smart grid projects.

Virgin Islands: Virgin Islands Water and Power Authority, $13,000,000. Funds will be used for smart grid projects.

Virginia: BARC Electric Cooperative, $6,000,000. Funds will be used to serve 489 consumers, build 82 miles of distribution line, and make other system improvements. The loan amount includes $169,500 for smart grid projects.

Wisconsin: Chippewa Valley Electric Cooperative, $3,000,000. Funds will be used to serve 38 consumers, build 40 miles of distribution line, and make other system improvements. The loan amount includes $147,188 for smart grid projects.

Wisconsin, Iowa, Illinois, Michigan, Minnesota: Dairyland Power Cooperative, $121,562,000. Funds will be used to build and improve 87 miles of transmission line, five new substations, and make other system improvements. The loan amount includes $800,000 for smart grid projects